BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 122| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 122 Author: Jackson (D) and Hill (D), et al. AmendedAmended:6/1/15 Vote: 21 SENATE ENVIRONMENTAL QUALITY COMMITTEE: 5-1, 4/15/15 AYES: Wieckowski, Hill, Jackson, Leno, Pavley NOES: Gaines NO VOTE RECORDED: Bates SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/28/15 AYES: Lara, Beall, Hill, Leyva, Mendoza NOES: Bates, Nielsen SUBJECT: California Environmental Quality Act: record of proceedings SOURCE: Author DIGEST: This bill authorizes concurrent preparation of the record of proceedings while a lead agency is conducting an environmental review on a project subject to the California Environmental Quality Act (CEQA) and expands the Office of Planning and Research's (OPR's) central database of CEQA documents. ANALYSIS: Existing law, under CEQA: 1) Requires lead agencies with the principal responsibility for SB 122 Page 2 carrying out or approving a proposed discretionary project to prepare a negative declaration, mitigated negative declaration, or environmental impact report (EIR) for this action, unless the project is exempt from CEQA (CEQA includes various statutory exemptions, as well as categorical exemptions in the CEQA guidelines). (Public Resources Code (PRC) §21000 et seq.). 2) Establishes a procedure for preparing and certifying the record of proceedings for an action against a public agency on the grounds of noncompliance with CEQA. (PRC §21167). 3)Requires the lead agency to submit to the State Clearinghouse a sufficient number of copies of specified environmental review documents and a copy in an electronic form under specified circumstances. (PRC §21082.1). 4) Requires OPR to establish and maintain a database to assist in the preparation of environmental documents. (PRC §21159.9(b)). 5) Requires OPR to establish and maintain a central repository for the collection, storage, retrieval, and dissemination of specified notices and make those notices available through the Internet. (PRC §21159.9(c)). This bill: Concurrent preparation of the record of proceeding 1)Requires the lead agency, upon written request by a project applicant and with consent of the lead agency, to concurrently prepare the record of proceedings with the administrative process. 2)Requires all documents and other materials placed in the record of proceedings to be posted on a Web site maintained by the lead agency. 3)Requires the lead agency to make publicly available, in electronic format, the draft environmental document, and associated documents, for the project. SB 122 Page 3 4)Requires the lead agency to make any comment publicly available electronically within five days of its receipt. 5)Requires the lead agency to certify the record of proceedings within 30 days after filing notice of determination or approval. 6)Requires certain environmental review documents to include a notice, as specified, stating that the document is subject to this section. 7)Requires the applicant to pay for the lead agency's cost of concurrently preparing and certifying the record of proceedings. State Clearinghouse database system for CEQA documents 8)Requires OPR to establish and maintain a database for the collection, storage, retrieval, and dissemination of environmental documents and notices prepared pursuant to CEQA and to make the database available online to the public. 9)Requires OPR to submit a report describing the implementation of the database to the Legislature by July 1, 2016, and a status report by July 1, 2018. Background 1)CEQA: The environmental review process. A CEQA environmental review document is a public document. It provides for transparency as well as an opportunity for citizens to comment on the document and participate in the environmental review process. CEQA provides a process for evaluating the environmental effects of a project, and includes statutory exemptions as well as categorical exemptions in the CEQA guidelines. If a project is not exempt from CEQA, an initial study is prepared to determine whether a project may have a significant effect on the environment. If the initial study shows that there would not be a significant effect on the environment, the lead SB 122 Page 4 agency must prepare a negative declaration. If the initial study shows that the project may have a significant effect on the environment, then the lead agency must prepare an EIR. Generally, an EIR must accurately describe the proposed project, identify and analyze each significant environmental impact expected to result from the proposed project, identify mitigation measures to reduce those impacts to the extent feasible, and evaluate a range of reasonable alternatives to the proposed project. Prior to approving any project that has received an environmental review, an agency must make certain findings. If mitigation measures are required or incorporated into a project, the agency must adopt a reporting or monitoring program to ensure compliance with those measures. If a mitigation measure would cause one or more significant effects in addition to those that would be caused by the proposed project, the effects of the mitigation measure must be discussed but in less detail than the significant effects of the proposed project. 2)What is analyzed in an environmental review? Pursuant to CEQA, an environmental review analyzing the significant direct and indirect environmental impacts of a proposed project, may include water quality, surface and subsurface hydrology, land use and agricultural resources, transportation and circulation, air quality and greenhouse gas emissions, terrestrial and aquatic biological resources, aesthetics, geology and soils, recreation, public services and utilities such as water supply and wastewater disposal, cultural resources such as historical and archaeological resources, and tribal cultural resources. The analysis must also evaluate the cumulative impacts of any past, present, and reasonably foreseeable projects/activities within study areas that are applicable to the resources being evaluated. A study area for a proposed project must not be limited to the footprint of the project because many environmental impacts of a development extend beyond the identified project boundary. Also, CEQA stipulates that the environmental impacts must be measured against existing physical conditions within the project area, not future, SB 122 Page 5 allowable conditions. Comments 1)Purpose of bill. According to the authors: [CEQA] ensures that state and local agencies make informed decisions when undertaking projects that may impact the environment. Stakeholders have voiced concern that the current CEQA process can be cumbersome and inefficient. In May 2014, the Senate Judiciary and Environmental Quality Committees sent a joint letter to a broad range of CEQA stakeholders - developers, business, environmental, and labor groups, planners, local governments, and academics - asking for community input on how to improve the process without undercutting the statute's goal of fostering informed environmental decisionmaking. Drawing upon stakeholder responses to that letter, this bill will enact [two] substantive changes to CEQA that will help expedite the process while protecting the integrity of the act. First, it will authorize lead agencies to concurrently prepare their administrative records while going through the CEQA process, rather than after the process has concluded. Second, it will improve the accessibility of CEQA related documents by expanding the use of California's online CEQA State Clearinghouse. During the Senate Judiciary Committee hearing last year on SB 1451 (Hill and Roth) regarding CEQA "document dumping," Senator Jackson and Senator Hill agreed to explore ways to improve the CEQA process in conjunction with the broader CEQA community. As part of that effort, they sent a joint letter to CEQA stakeholders asking for community input on how to improve the process without undercutting the statute's goal of fostering informed environmental decisionmaking. The Senate Environmental Quality and Judiciary Committees received 13 responses from stakeholders who collectively represent a cross-section of the CEQA community. Two broad consensus recommendations emerged from these 13 responses, and many community members indicated that these two recommended changes would greatly improve the CEQA process: SB 122 Page 6 concurrent preparation of the record of proceedings and a centralized database for CEQA documents. 2) Concurrent preparation of the record of proceedings. a) Potential time-saver for post-decision CEQA challenge. SB 122 provides the option of preparing the record of proceedings during the CEQA environmental review process in order to save time and effort in the event of a post-decision CEQA challenge. Depending on factors such as the complexity and length of the environmental review, preparation can take multiple months. However, in situations where an agency believes a project is likely to be challenged, it is probably more efficient and expeditious if the record is prepared concurrently with the preparation of other project-specific environmental documents. Additionally, concurrently prepared records may be more defensible in court, given that they are not post-hoc recreations assembled some time (potentially several months) after the relevant CEQA decision is made. Concurrent preparation is not specifically prohibited under existing law, but it has only been expressly authorized for certain projects (e.g. AB 900 (Buchanan and Gordon, Chapter 354, Statutes of 2011), environmental leadership development projects (ELDPs)). Providing public agencies a general authorization to engage in concurrent preparation may take away any uncertainty on the matter and make a public agency more likely to adopt the practice for appropriate projects. b) Time is money. In general, preparation of the record of proceedings begins after a lawsuit is filed and the petitioner pays. This can result in a substantial amount of time to go by before there is any resolution. One issue that some CEQA stakeholders contend is that CEQA litigation delays projects. As noted above, the concurrent preparation of the record of proceedings can save the project applicant several months of delay. It seems logical and reasonable that the beneficiary of an action should pay for that action to occur. SB 122 Page 7 If a project applicant believes that litigation is inevitable, it may behoove that entity to ask the lead agency to prepare the administrative record in conjunction with the environmental review process - the efficiency of simultaneous preparation can possibly save months of time preparing for litigation, such as tracking down and collecting documents to add to the administrative record. For example, under AB 900, five project applicants have/are utilizing concurrent preparation process as an ELDP. Those projects had to meet stringent standards in order to be an ELDP and benefit from AB 900's provisions, including concurrent preparation of the administrative record for which the project applicant pays. SB 122's concurrent preparation provision is discretionary and not mandatory. If an applicant has no reason to believe that its project will be subject to litigation, then the applicant may choose not to utilize this option. 3) Increase use of Internet resources - The State Clearinghouse. The authors state, "[OPR] operates a limited online CEQA repository (called "CEQAnet") as part of the State Clearinghouse used for state-level review of environmental documents. This second component of this bill will direct OPR to expand its online CEQA repository to include copies of all CEQA documents in a single repository, forming a true statewide CEQA clearinghouse." Many CEQA stakeholders have noted that the CEQA process makes poor use of internet resources for distributing information, providing notice to affected parties, and facilitating the submission of comments. The current CEQA process is still largely paper-based, and information that is posted online is often buried deep within agency or project proponent Web sites. Currently, OPR has operates a limited online CEQA repository as part of the State Clearinghouse used for state-level review of environmental documents. This bill proposes to expand OPR's clearinghouse to include copies of all CEQA documents in a single, electronic database system, SB 122 Page 8 which would be available via the Internet and to the public. Stakeholders believe such a resource would greatly expedite the CEQA process by eliminating transmission times for relevant documents. In addition, universal accessibility of such a resource would make it much harder to justify last minute "document dumps." A fully functioning clearinghouse would provide California residents with an easy to use, universal point of entry into the CEQA process, furthering the policy of transparency and public participation in the environmental review process. 4) Proposed central database: potential cost savings. Expanding OPR's CEQA database would require a financial commitment by the state, but it is likely that any new costs could be offset by reductions in agency staff time and resources used to distribute paper-based materials. Last year, the California Research Bureau (CRB) researched CEQA-related document handling costs for selected state agencies and looked into issues such as clerical document management and preparation and delivery costs. According to CRB: We estimate that the cumulative annual cost to State entities in staff time commitments for clerical processing and handling of CEQA-related documents exceeds $250,000 and may easily be in excess of $500,000, with additional expenditures for materials, supplies, and delivery services. Not all of these staff expenditures are truly avoidable costs, as few State entities delegate any clerical staff full-time to CEQA-related document handling functions. But it appears plausible that an effective, electronic document management system and web-based application for CEQA-related document submission and retrieval by Lead Agencies and Reviewing Agencies could generate cost savings across the state. Under CEQA, the Legislature declares the policy of the state shall be that "All persons and public agencies involved in the environmental review process be responsible for carrying out the process in the most efficient, expeditious manner in order to conserve the available financial, governmental, physical, and social resources with the objective that those SB 122 Page 9 resources may be better applied toward the mitigation of actual significant effects on the environment." (PRC §21003(f)). SB 122 proposes to help move CEQA forward by utilizing technology that was not present when CEQA was originally established. Related/Prior Legislation SB 1451 (Hill and Roth, 2014) would have expanded CEQA's exhaustion requirements by precluding an individual from challenging a public agency's compliance with the Act if the alleged grounds of noncompliance were known or could have been known with the exercise of reasonable diligence during the public comment period, but the alleged grounds of noncompliance were presented to the public agency at a time other than during the public comment period. The bill also would have expanded CEQA's exhaustion requirements by precluding a person from challenging a public agency's compliance if the person objected to the approval of the project at a time other than during the public comment period when a public comment period was provided. SB 1451 died in Senate Judiciary Committee. SB 731 (Steinberg and Hill, 2013) would have enacted the "CEQA Modernization Act of 2013," making various clarifications and revisions to CEQA, including requiring the lead agency, at the request of a project applicant, to prepare and certify the record of proceedings concurrent with the administrative process for certain environmental documents under certain conditions. SB 731 died in Assembly Local Government Committee. AB 37 (Perea, 2013) would have required the lead agency, upon request of a project applicant, to prepare and certify the record of proceedings concurrently with the administrative process for projects subject to CEQA review. AB 37 was subsequently amended to address integrated regional water management plans and was eventually placed on the Senate Inactive file. SB 984 (Simitian, 2012) would have required a lead agency to prepare and certify the record of proceedings concurrent with the administrative process for certain environmental documents under certain conditions, and would have sunsetted January 1, SB 122 Page 10 2016 (contingent enactment with AB 1570 (Perea)). SB 984 died on the Senate Floor. AB 1570 (Perea, 2012) contained provisions relating to certification of the record of proceedings concurrent with the administrative process for certain environmental documents under certain conditions, and would have sunsetted on January 1, 2016 (contingent enactment with SB 984 (Simitian)). AB 1570 died in Senate Rules Committee. AB 900 (Buchanan and Gordon, Chapter 354, Statutes of 2011) established CEQA administrative and judicial review procedures for an environmental leadership development project, including a requirement for concurrent preparation of the administrative record. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No According to the Senate Appropriations Committee: One-time costs of $200,000 from the General Fund to establish the database at the Office of Technology, including necessary training. Ongoing costs of $45,000 from the General Fund to the Office of Technology to host and update the database. These costs may be offset by savings to various special funds and the General Fund for reduced administrative costs to state lead agencies. One-time costs of $20,000 from the General Fund to OPR to provide training for lead agencies on the new database. Unknown costs to state agencies, to the extent they are the lead agency under CEQA, to concurrently prepare the record of proceeding (various special funds and General Fund). These costs should be fully reimbursed by project applicants who request the record of proceedings to be prepared concurrently SB 122 Page 11 with the administrative process. SUPPORT: (Verified5/28/15) Association of Environmental Professionals Brandt-Hawley Law Group California Labor Federation California League of Conservation Voters Center for Biological Diversity Chatten-Brown & Carstens Natural Resources Defense Council Shute, Mihaly & Weinberger LLP State Building and Construction Trades Council OPPOSITION: (Verified5/28/15) Associated General Contractors of California Association of California Cities, Orange County Association of California Water Agencies Bay Area Council Bay Planning Coalition California Business Properties Association California Business Roundtable California Construction and Industrial Materials Association California Retailers Association Central City Association of Los Angeles Engineering Contractors' Association Harbor Association of Industry & Commerce Humboldt Association of REALTORS Los Angeles Area Chamber of Commerce Los Angeles County Economic Development Corporation National Federation of Independent Business Orange County Business Council Pleasanton Chamber of Commerce San Diego Regional Chamber of Commerce San Francisco Chamber of Commerce San Gabriel Valley Economic Partnership San Mateo County Association of REALTORS SB 122 Page 12 Santa Clara Chamber of Commerce Santa Clarita Valley Economic Development Corporation Sonoma County Alliance Southern California Water Committee Southwest California Legislative Council UnitedAg Valley Industry & Commerce Association West Coast Lumber and Building Materials Association ARGUMENTS IN SUPPORT: A coalition of support states, "One concern raised with respect to CEQA is the delay associated with litigation. In our experience preparation of the administrative record is usually the most time consuming part of CEQA litigation in the trial court. Section 1 of the bill would allow project applicants to request preparation of the record concurrent with the administrative review process. Because most environmental documents are already available in an electronic format, this option could be easily implemented and would reduce the time needed to prepare the record if litigation is filed. Although we support the concept of concurrent preparation, because this is an option available at the project applicant's discretion, the bill should ensure that the cost of such preparation is borne by the project applicant?Section 2 would require electronic posting of notices and environmental documents. This amendment is a critical reform that will modernize CEQA and make the environmental review process more transparent." ARGUMENTS IN OPPOSITION: A coalition of opposition states, "SB 122's concurrent preparation of the administrative record process will rarely-if ever-be utilized because it would impose new, unrecoverable costs on the project applicant and expose applicants to new delays and litigation. Under existing law, it is well-settled that the petitioner must pay the costs of preparing the administrative record during CEQA litigation or claims. SB 122 allows project applicants to request concurrent preparation of the record, but if such request is made, the cost of preparing the administrative record - which could range in the hundreds of thousands - would shift entirely to project applicants as unrecoverable costs. Equally concerning is the provision that would require real-time electronic posting of the SB 122 Page 13 contents of the administrative record as they are compiled. The administrative record contains incomplete documents that inevitably morph into much improved final documents as a result of the iterative process that CEQA requires. This provision would hinder forward progress of the administrative process by allowing the public to submit premature and unnecessary comments and objections to draft documents that have not yet even been corrected, improved, and finalized through the lead agency's internal review process." Prepared by:Joanne Roy / E.Q. / (916) 651-4108 6/1/15 18:50:14 **** END ****